This may come as a surprsie to you but you know the moment you get that warm fuzzy feeling when you get told ' we really like your product' or ' we love the team you've put together' and the best of all' we want to invest in your company and take you all the way'.
Someone wants you?
No - someone wants what is yours.
The problem is that for msot companies out on the investment merry- go- round by the time they have reached the point of an offer being made they are what you might term as calorie deficient , yes thay have run out of cash.
So its understandable that you are going to want to take whatever offer is on the table.
And maybe you don't have a choice. But at least armed with the answers to the questions below at least you know which type of shark you are going to be in water with and just how deep that water is likely to be.
1. Provide a list of every founder whose company they have ever invested in, and contact information for each. Insist on this, and contact each one.
2. Ask them why most of their portfolio company websites do not even list the founders any more. Ask what happened to each of them, and what kind of relationship they still have with them.
3. Ask them how many founders were terminated vs voluntarily stepped down, and realize that what is formally said is often not what really happened.
4. For intellectual property (patents) that you will be required to sign over to the company, ask them how much they intend to pay you for it. DO NOT sign it over to your company for free.
5. Ask them how many of their companies still have the founder on board in some capacity. Ask why the others left. Ask how many they have worked with in more than one company. Ask to speak to every remaining founder, not just the ones they willingly provide. Be aware that many of these founders will be wary, and fearful of retribution.